Why Are Flights So Expensive Right Now? 7 Factors Impacting Prices
If you recently tried to book a summer vacation or even start planning ahead for holiday season travel, you might have noticed flights are expensive. According to consumer price index data released in July 2023, even though flight prices had dropped by 18.9% since June 2022, they remain elevated.
See: How To Save $200 on Your Grocery Bill Every Month
According to Adobe Analytics data released in June 2022, major U.S. airlines had raised their prices for domestic flights by 47% since January 2022. While the consumer price index report shows prices gradually dropping, hidden fees and baggage costs add up, making the costs of air travel more than you might expect.
Why Are Flight Prices So High Right Now?
Not surprisingly, many of the same factors causing flight delays and cancellations also increase costs for travelers. Here’s a look at seven factors impacting flight prices.
1. Increased Fuel Costs
Jet fuel represents a substantial expense for airlines. Although fuel prices have declined by 24.3% since this time last year, they have risen 8.4% between June 21 and July 21 of this year and 2% between July 14 and July 21 of this year.
“Jet fuel prices are a considerable cost for airlines and remain about 16% higher than pre-pandemic levels,” Hayley Berg, lead economist at the travel app Hopper, told Best Life, according to an article published by the lifestyle website in late May. “Though fuel costs have improved considerably in the last 15 months, prices remain the highest they’ve been since late 2014.”
2. The Need To Circumvent Russian Airspace
In addition to the Russia-Ukraine war driving up oil and fuel prices, the conflict has also created challenges for international flights. Russia has banned roughly 36 countries, including all countries in the European Union, from flying through Russian air space. This creates longer flights for airlines that travel from Europe to Asia. This can have a ripple effect, where fewer planes are available for other flights, such as from Europe or Asia to the U.S.
3. Staffing Shortages
The U.S. faces a shortage of 32,000 pilots, mechanics and air traffic controllers, according to CBS News. Not only is this creating flight cancellations and delays, but it’s driving up prices since fewer flights are available for travelers.
The need to recruit pilots, especially, has led many airlines to increase pilot salaries, which means the airlines must raise flight prices to compensate for growing payroll costs. The same is happening for flight attendants and air traffic controllers, who all make up crucial pieces of the puzzle required to get flights in the air.
4. Reduced Supply
Due to staffing shortages and aging equipment, there are roughly 18% fewer seats available on U.S. planes today compared to 2019, says a report from OAG.
In the past five years, there have been 48% fewer flights on some of the nation’s busiest routes between the nation’s largest airports. Experts told CBS News that the issue could continue for a decade. Until it gets sorted out, travelers are unlikely to see cheap flights.
5. Increased Demand
The flight shortage, of course, drives up prices. But increased demand for air travel compounds the problem. More people are shopping for fewer flights, which means airlines can get away with charging more. For the first time since 2020, there is a population ready, eager and able to travel.
Thanks to a strong economy, in spite of inflation and rising interest rates, people are finding the money to take that dream vacation or to visit far-flung friends and family. Global leisure travel rose by 31% in March 2023 compared to March 2019, and by 25% since March 2022, according to the Mastercard Economics Institute’s Travel Industry Trends 2023 report.
6. Aging Airline Infrastructure
When Southwest Airlines canceled more than 15,700 flights during last year’s December holiday season, it pointed to infrastructure problems across the industry. Southwest is not the only airline with aging IT infrastructure. An NPR article pointed out that Spirit, American Airlines and Delta experienced similar “operational meltdowns.”
As airlines look to upgrade their IT systems, these expenses could be passed down to customers in the form of higher ticket prices.
7. Hidden Costs and Fees
It’s not just airline flights that are so expensive in 2023. Some airlines charge extra for priority boarding or even to choose the seat you’d like on the plane. Most have baggage fees for checked luggage, and some, like Spirit, even charge for carry-on bags.
When you’re comparing prices for flights from different carriers, make sure you’re making a true apples-to-apples comparison. The lowest-priced airline could end up costing more if you’re flying with luggage.
Will Flights Get Cheaper in 2023?
Inflation is beginning to cool on items like food cooked at home, fuel at the pump, natural gas and even used vehicles, according to the consumer price index report released in July. It’s safe to say that flights may also continue to get cheaper in 2023.
Between May and June 2023, the price of Jet A fuel dropped by 13 cents. At $6.59 per gallon, it is down by $1.38 from June of last year, according to statistics from Argus International published in Aviation Week. If the trend continues, travelers can expect airline prices to stabilize, with the expected seasonal price increases during the holiday season.
Final Note
Airline flights are expensive right now, but they are falling faster than many other goods and services in the second half of 2023.
Fortunately, you don’t have to wait for airline ticket prices to fall to save money. Leverage travel rewards credit cards and frequent flyer miles to get deals. Shop through travel search engines and portals like Kayak to find the best deals, but don’t neglect to check the airlines’ websites, as well.
FAQ
See what people are asking about expensive flights right now.
Why are flights so expensive in 2023?
Flights cost even more in early 2023 than they do now. Factors such as fuel costs, staffing shortages, aging IT infrastructure and hidden fees all contribute to expensive flights in 2023.
Why is Delta so expensive right now?
Delta, one of the major carriers in the U.S., was one of the first to increase pilot salaries to deal with the staffing shortage and recruit talent to its organization. Delta pilots negotiated a contract for an 18% immediate increase in March, plus a total raise of 34% over the next three years.
Data is accurate as of July 28, 2023, and is subject to change.
This article originally appeared on GOBankingRates.com: Why Are Flights So Expensive Right Now? 7 Factors Impacting Prices